Virginia Mining began operations by issuing common stock for $150,000. The company paid $135,000 cash in advance
Question:
Virginia Mining began operations by issuing common stock for $150,000. The company paid $135,000 cash in advance for a one-year contract to lease machinery for the business. The lease agreement was signed on March 1, Year 1, and was effective immediately. Virginia Mining received $172,500 of cash revenue in Year 1.
Required
a. Record the March 1 cash payment in general journal format.
b. Record in general journal format the adjustment required as of December 31, Year 1.
c. Show all Year 1 events in a horizontal statements model like the following one:
d. What amount of net income would be reported on the Year 1 income statement? What is the amount of net cash flow from operating activities for Year 1?
e. Determine the amount of prepaid rent that would be reported on the December 31, Year 1, balance sheet.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
a b Virginia Mining Journal Entries for Year 1 Date Account Titles Debit Credit a 31 Prepaid Rent Le...View the full answer
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
